3 I. Introduction In its report, Our Common Future, published in 1987, the World Commission on Environment and Development highlighted the need for countries to adopt policies in support of sustainable development. In so doing, the report emphasized that economic growth, environmental protection and social equity can be simultaneously maintained. Five years after Our Common Future was published, countries affirmed their commitment to pursue policies that promote sustainable development at the United Nations Conference on Environment and Development (Earth Summit) in Rio de Janeiro, Brazil. The Earth Summit was attended by government representatives from 172 countries and resulted in the Rio Declaration on Environment and Development and Agenda 21. Among other things, Agenda 21 called on governments, in cooperation with international organizations, to build national capacities to integrate social, economic, developmental and environmental issues at all levels of development decision-making and implementation. The United Nations Millennium Declaration, adopted by 189 nations in 2000, reaffirmed the basic principles of sustainable development and Agenda 21, and strongly emphasized the need to create an environment at national and global levels which is conducive to development and the elimination of poverty. As one of the eight Millennium Development Goals (MDGs), 1 MDG 7 asks countries to ensure environmental sustainability by among other targets - integrating the principles of sustainable development into country policies and programmes. The importance of developing and implementing integrated policies that promote sustainable development continues to be recognized by the international community. For example, the World Summit on Sustainable Development (WSSD) Plan of Implementation, agreed to in Johannesburg, South Africa in 2002, emphasized the importance of taking a holistic and intersector approach in supporting sustainable development. The Plan of Implementation commits heads of states and governments to advance and strengthen the three interdependent and mutually reinforcing components of sustainable development economic growth, social equity and environmental protection at local, national, regional and global levels. The Plan of Implementation also highlighted the importance of capacity building in furthering the understanding of practitioners and policy-makers about the complex linkages between environment and sustainable development, and encouraged the design and implementation of integrated policies, plans and programmes. Although these international agreements and statements represent a significant step forward in the promotion of integrated policy design and implementation, they must be translated into concrete actions in order to address environmental deterioration, contribute to the reduction of poverty and promote sustainable development. The recent review for the 2005 World Summit in September in New York on the progress made with respect to the MDGs sees positive developments in countries commitment to incorporating the principles of sustainable development into their national policies and strategies but does not see sufficient progress on the ground to reverse the loss of environmental capital. 2 In order to assist countries to address these challenges the international community needs to increase the amount and effectiveness of capacity building activities. The importance of capacity building is widely acknowledged but much greater effort must be made to link capacity building efforts to poverty reduction strategies and the goals identified in the Millennium Development Declaration. UNEP has recently responded to this call by adopting the Bali Strategic Plan for Technology Support and Capacity Building in February 2005, which aims to strengthen the 1 MDG 1: Eradicate extreme poverty and hunger; MDG 2: Achieve universal primary education; MDG 3: Promote Gender equality and empower women; MDG 4: Reduce child mortality; MDG 5: Improve maternal health; MDG 6: Combat HIV/AIDS, malaria and other diseases; MDG 7: ensure environmental sustainability; MDG 8: Develop global partnership for Development. 2 Progress towards the Millennium Development Goals , compiled by an inter-agency and expert group on MDG indicators led by the Department of Economic and Social Affairs of the United Nations Secretariat. UNEP/ETB September 05 3

4 capacity of governments of developing countries and countries with economies in transition, at all levels, to among other things achieve environment-related internationally agreed goals, including those contained in the Millennium Declaration and WSSD Plan of Implementation. In preparation for the Bali Plan and with the goal of improving the effectiveness of capacity building programmes in support of integrated policy design and implementation, the Economics and Trade Branch (ETB) of UNEP has facilitated a comprehensive consultation process with a wide range of international, regional and national institutions over the last several years. This consultation process is being conducted through a series of international and regional workshops and meetings focused on developing mutually supportive environment, trade and economic policies. The consultations undertaken at these meetings have been supplemented by detailed stocktaking questionnaires on capacity building needs and activities distributed to governments and academic and private institutions. This consultation process aimed to achieve the following: Gather information on existing capacity building services (capacity building providers, their approaches and delivery mechanisms); Identify current shortcomings of capacity building efforts; Identify capacity building priorities and needs at the national and regional levels; Promote international cooperation on capacity building for sustainable development; and Develop recommendations for more effective, coordinated and demand-driven capacity building programmes. The purpose of this paper is to compile the outcomes and findings of the UNEP-facilitated consultation process to date. Along these lines, Section II briefly describes the background of the UNEP initiative, and Section III describes some of the challenges and shortcomings of current capacity building programmes related to integrated policy design and implementation. Section IV outlines the main recommendations resulting from the consultation process for developing more coordinated, demand-driven and effective capacity building programmes. Finally, Section V discusses current capacity building needs identified in support of enhancing integrated policy design and implementation. This paper is intended to be a working document, and as the discussion on capacity building for sustainable development evolves, the paper will be updated and expanded to incorporate new findings, inputs and suggestions made by governments and international, regional and national institutions. As is discussed in greater detail below, the definition of capacity building is broad and can encompass a multitude of activities involving a number of issues. However, for the purposes of this paper and its annexes, the discussion of capacity building activities is limited to those in support of integrated policy design and implementation related to environment, trade and economic issues. Moreover, this paper does not profess to offer a definitive treatment of the challenges of capacity building for integrated policy design and implementation, but rather seeks to contribute to the ongoing international dialogue on ways to improve current capacity building efforts. Specifically, this paper aims to serve as a tool to: Provide information about the needs, priorities and key elements of capacity building to a broad audience and identify a range of delivery mechanisms for capacity building; Provide information about regional capacity building priorities as identified by institutions and individuals (see Annex I); Provide information on the main capacity building activities provided by intergovernmental and non-governmental institutions, including activities undertaken in support of the implementation of multilateral environmental agreements (MEAs) (see Annexes II & III); Promote coordination, coherence, and synergies by encouraging intergovernmental and interinstitutional dialogues, cooperation and sharing of information and experiences; and UNEP/ETB September 05 4

5 Ensure that capacity building services reflect identified needs of beneficiaries. National, regional and international institutions, MEA Secretariats and other stakeholders at all levels are invited to engage in the process of updating, redrafting and expanding this paper by providing comments and suggestions, as well as information about their capacity building needs and priorities, activities and initiatives related to integrated policy design and implementation. Annex III provides a brief outline of capacity building activities and programmes provided by several intergovernmental and non-governmental organizations. It is intended that this information be continuously expanded and updated to serve as a reference for capacity building providers and beneficiaries. UNEP/ETB September 05 5

6 Box 1: International Statements on Capacity Building and Integrated Policy Design and Implementation A number of international conferences, declarations and recommendations have highlighted the importance of capacity building for sustainable development, as well as the need for integrated policy design and implementation. They further called for strengthening of inter-institutional cooperation. The following excerpts provide examples of such recent statements: The United Nations Conference on Environment and Development (UNCED) in Rio noted in Agenda 21 (1992): Governments, in cooperation with international organizations, should strengthen national institutional capability and capacity to integrate social, economic, developmental and environmental issues at all levels of development decision-making and implementation. Attention should be given to moving away from narrow sectoral approaches, progressing towards full cross-sectoral coordination and cooperation. (Paragraph 8.12). This call has been reconfirmed by the UN General Assembly in its Rio+5 Resolution (1997) stating that: International cooperation and support for capacity-building in trade, environment and development policy formation should be strengthened through renewed system-wide efforts and with enhanced responsiveness to sustainable development objectives by the United Nations, the World Trade Organization, the Bretton Woods institutions, and national Governments. (Decision 8/6, paragraph 29) Governments reaffirmed their commitment to sustainable development and poverty reduction at the Millennium Summit of the UN General Assembly in New York (2000) and mentioned as part of the Millennium Declaration, that to ensure environmental sustainability each country should integrate the principles of sustainable development into country policies and programmes (Millennium Development Goal 7, Target 9) More recently, the World Summit on Sustainable Development in Johannesburg (2002) emphasized in its Plan of Implementation that developing and transition countries face special difficulties in responding to the challenges and opportunities of globalization (paragraph 45) and that making globalization fully inclusive and equitable would require policies and measures at the national, regional and international levels, formulated and implemented with the participation of developing and transition countries, which respond effectively to their emerging needs and priorities. The Plan further emphasized the need for urgent action to enhance the delivery of coordinated, effective and targeted trade-related technical assistance and capacity-building programmes, including to take advantage of existing and future market access opportunities, and to examine the relationship between trade, environment and development (paragraph 45(e)), and also stressed the need to encourage the voluntary use of environmental impact assessments as an important national-level tool to better identify trade, environment and development interlinkages. (Paragraph 91d) WSSD further stated the need to strengthen cooperation among UNEP and other United Nations bodies and specialized agencies, the Bretton Woods institutions and WTO (paragraph 136), and that UNEP, UN-Habitat, UNDP and UNCTAD should strengthen their contribution to sustainable development programmes and the implementation of Agenda 21 at all levels, particularly in the area of promoting capacity-building. (Paragraph 137) In the WTO Ministerial Declaration from Doha (2001), the WTO recognized the importance of technical assistance and capacity building in the field of trade and environment to developing countries, in particular the least-developed among them, while encouraging that expertise and experience be shared with Members wishing to perform environmental reviews at the national level. (Paragraph 33) The United Nations Conference on Financing for Development, held in Monterrey, Mexico (2002), recognized that to benefit fully from trade, which in many cases is the single most important external source of development financing, the establishment or enhancement of appropriate institutions and policies in developing countries, as well as in countries with economies in transition, is needed. (Paragraph 27) In 2001, UNEP s Governing Council (GC) requested UNEP to assist countries, particularly developing countries and countries with economies in transition, to enhance their capacities to develop and implement mutually supportive trade and environmental policies, in a manner that is geared to reflect the socio-economic and development priorities, as well as the needs and capacities of individual countries (GC 21/14). Finally, in 2005 UNEP s GC adopted the Bali Strategic Plan for Technology Support and Capacity Building which requested UNEP to enhance delivery by UNEP of technology support and capacity building to developing countries and countries with economies in transition, including through mainstreaming technology support and capacity building throughout UNEP activities. (GC 23/1/I) UNEP/ETB September 05 6

7 II. Background As previously noted, UNEP has facilitated a series of international and regional meetings and workshops over the past several years in support of integrated policy design and implementation. In undertaking this task, UNEP has worked with a number of institutional partners, including UNCTAD under the joint UNEP-UNCTAD Capacity Building Task Force (CBTF) on Trade, Environment and Development; the Secretariats of the MEAs; the World Trade Organization (WTO); the United Nations Development Programme (UNDP); the World Bank; and the Food and Agriculture Organization (FAO), as well as a number of regional and sub-regional institutions. To initiate this consultative process, a high-level international meeting was held in Berlin on March 2001 to discuss the linkages between environment, trade and sustainable development, including the need for capacity building to implement mutually supportive environment and trade policies. The meeting was attended by ministers and environment and trade officials from over 70 countries, as well as representatives from the WTO, MEAs and civil society. The Berlin meeting was followed a year later by an international workshop on capacity building, trade and development convened in collaboration with the WTO in Geneva on March The workshop aimed at identifying gaps, challenges and opportunities for capacity building in the field of trade, environment and sustainable development. As a follow-up to this workshop, several regional workshops were convened to identify capacity building priorities, needs and delivery mechanisms in different regions of the world. The first in this series was a workshop convened in Washington DC on Capitol Hill on 16 July 2002, which focused on identifying the capacity building providers in North America and the capacity building needs of the region. The most recent one was convened on Jeju Island, Republic of Korea on March In addition to reviewing the outcome and findings of the UNEP-facilitated consultation process, the meeting focussed on promoting international cooperation, identifying needs and priorities in relation to MEAs and propose recommendations for more effective, coordinated and demanddriven capacity building programmes. The meeting especially focussed on the needs and priorities of the Asia region. (The Chairman s Summaries for these meetings are available at Other regional meetings and consultations were conducted in Europe, Africa, Latin America, the Caribbean, and the Pacific Region. Most of these regional workshops and meetings were convened jointly by UNEP and UNCTAD under the CBTF. The meetings were attended by officials from over 80 countries, representing environment, trade, foreign affairs and economic ministries, and also involved representatives of international institutions, such as MEAs, UNDP, the World Bank, the WTO, and regional institutions, such as the CEC, NEPAD, SADC, CARICOM, the Andean Community Secretariat, and the Pacific Islands Forum Secretariat. The consultations focused primarily on modalities for designing and implementing mutually supportive trade and environment policies, and examined opportunities for enhanced cooperation between capacity building providers at the regional and international level. (Full-text reports of these meetings are available at These regional meetings and consultations have been supplemented by a detailed stocktaking questionnaire on capacity building needs and activities distributed to governments, regional organizations, academic institutions, NGOs, experts and other entities involved in capacity building programmes. A list of capacity building providers with those institutions responding to the questionnaires highlighted is provided in Annex II. Following the Conference held in in Jeju Island, Republic of Korea in March 2004, which provided the basis for the last comprehensive update of this paper, UNEP has focused its efforts on addressing the main capacity building needs identified during the consultation process (see Chapter V). A series of capacity building workshops conducted under the UNEP-UNCTAD Capacity Building Task Force (CBTF) addressed urgent needs for capacity building on integrated assessment, market access, MEA implementation, environmental goods and services and sustainable agriculture. Other UNEP-led capacity building activities addressed the issue of UNEP/ETB September 05 7

8 positive and perverse incentives, focusing on fishery subsidy reform and promotion of economic instruments, natural resource valuation and accounting. While these activities are a first step towards addressing the identified needs, they are at the same time contributing to the process of continuous needs assessment. The workshops conducted over the last one and half years have reconfirmed the challenges and needs outlined in this paper. UNEP/ETB September 05 8

9 Box 2: Regional Consultations and Meetings European meetings. From March 2001, a high level international meeting was organized under the auspices of UNEP and the German Federal Ministry for Environment, Nature, Conservation and Nuclear Safety (BMU) in Berlin, which attracted ministers and high level environment and trade officials from over 70 countries, as well as representatives of intergovernmental organizations, including the WTO and MEAs, and civil society. UNEP subsequently organized an international workshop in collaboration with the WTO on Capacity Building on Environment, Trade and Development in Geneva on March 2002 to clarify ways to better design and coordinate capacity building programmes to meet the needs of developing and transition countries. North American meeting. An international workshop was held on 16 July 2002 in Washington DC on Capitol Hill, convened by UNEP, in cooperation with the Carnegie Endowment for International Peace, the WTO and UNCTAD Secretariats. This workshop was attended by approximately 150 participants representing the US and other governments, intergovernmental and non-governmental organizations, think-tanks, foundations, universities, corporations, trade associations, law firms and the media. Presentations and discussions identified countries capacity building needs and how international institutions could better respond to these needs. Latin American and Caribbean meetings. An Alliance of Small Island States workshop was held on trade and sustainable development on December 2001 in Montego Bay, Jamaica. Among other things, the workshop identified a number of issues for inclusion in needs assessments for capacity building initiatives in trade and environment in the region. A WTO regional workshop held on January 2002 in Castries, St. Lucia included the participation of UNEP, UNCTAD and the Secretariats of three MEAs, and underlined the value of collaborative approaches to capacity building, especially with respect to the special needs of least developed countries and small island states. To define capacity building priorities for the broader Latin American and Caribbean region, a workshop was held on February 2001 in Mexico City, co-sponsored by UNEP and other institutions including UNCTAD, the International Institute for Sustainable Development (IISD), the Mexican Council for Sustainable Development (COMEDES) and the National Autonomous University of Mexico. A second regional workshop for the region was held in Mexico City from March 2003 to identify priority capacity building activities for the development of a long-term capacity building programme on trade, environment and sustainable development. Another workshop organized under the CBTF was held in Kingston, Jamaica on November This workshop, which outlined and secured endorsement for a capacity building programme for this region, took place back-to-back with a WTO regional workshop on Trade and Environment, and was organized in collaboration with the Jamaican government, the Caribbean Community and Common Market (CARICOM) and the Institute for the Integration of Latin America and the Caribbean (INTAL) of the Inter-American Development Bank. African meeting. A workshop on Trade, Environment and Development was convened in Cape Town immediately following the WTO Regional Seminar for Anglophone African Countries held on 22 May Organized under the framework of the UNEP-UNCTAD CBTF, it was attended by representatives of the ministries of trade and environment of 16 African countries, the South African Development Community (SADC), The New Partnership for African Development (NEPAD) and the African Ministerial Conference on the Environment (AMCEN). The workshop provided an initial assessment of capacity building priorities, including the identification of priority topics for a regional workshop in There are plans to conduct a similar workshop for Francophone African countries. Pacific region meeting. The UNEP-UNCTAD CBTF held a workshop on Post-Doha Issues on Trade and Environment back-to-back with the WTO regional seminar for Pacific Island Countries on 29 November The Fiji meeting provided a forum for participants to identify priorities for possible future CBTF activities in the region. Asian meeting. An international meeting took place in Jeju Island, Republic of Korea, on March Co-hosted by the Korean Ministry of Environment and UNEP, it explored capacity building priorities related to environment, trade, and economic issues in the region, and served as a forum for discussing the outcomes and findings of the UNEP-facilitated consultation process to date and proposing recommendations for more effective, coordinated and demand-driven capacity building programmes. UNEP/ETB September 05 9

10 III. Challenges and Shortcomings of Capacity Building Assisting countries to meet the challenges of globalization and sustainable development places increasing demands on capacity building for integrated policy design and implementation. Despite recognition by the international community of the need for enhanced capacity building efforts, progress has been modest and current efforts are unable to satisfy the demand. In order to develop a more effective approach to capacity building for the development of mutually supportive environment, trade and economic policies, there is a need for capacity building service providers and beneficiaries to reassess current approaches and work together to design and implement more effective programmes. The UNEP-initiated consultation process identified the following challenges and gaps to effective capacity building: Many capacity building service providers have not sufficiently coordinated their programmes to, inter alia, ensure a consistent, cost-effective, and long-term approach to capacity building. In many cases, services have been, and continue to be, delivered on an uncoordinated, adhoc basis by different institutions. There is a need to enhance coordination and share best practices, information and experience. There is insufficient country ownership of capacity building activities. Many activities remain insufficiently participatory, are not demand driven and have been conceived without adequate consideration of the specific requirements, needs and conditions of beneficiary countries. Consequently, they fail to reach relevant stakeholders and hence ensure adequate involvement and buy-in for new policies or policy-making processes promoted through capacity building programmes. In addition, the involvement of the private sector both in programme delivery and as programme beneficiaries has often been limited. Many capacity building activities have been one-off exercises, without linkages and lacking monitoring, evaluation, reporting and ongoing needs assessments to respond to emerging policy needs and priorities. Capacity is undermined when there is no continuity in the activities and if adequate resources (including technology and equipment) are not available. In addition, capacity building initiatives frequently lack a strategy for maintenance of capacity that is successfully enhanced. The provision of capacity building assistance has generally been based on a flow of services from North to South and West to East, without encouraging the active involvement of regional, sub-regional and national institutions in their design and delivery. This has entailed lost opportunities for enhancing South-South and East-East cooperation. Funding in recent years for capacity building in support of integrated policy design and implementation has been unpredictable. Current levels fall far short of meeting the growing demand for these capacity building services. In some instances, resources for capacity building exist but the major obstacle is the delay in obtaining the funds. In light of these identified challenges and gaps, capacity building efforts must be advanced beyond currently adopted practices and approaches if they are going to meet the increasing and evolving needs of countries and regions. IV. Developing Better Capacity Building Programmes To develop better and more effective capacity building programmes, activities need to be clearly defined, coordinated and further extended to meet immediate and long-term country and regional needs and priorities. To achieve this, governments, funding agencies, service providers and beneficiaries should have a common understanding about the: definition of capacity building (i.e. what constitutes capacity building); objectives of capacity building (i.e. what capacity building should seek to achieve); key elements of capacity building (i.e. who should be involved and how); and UNEP/ETB September 05 10

11 delivery mechanisms available to build capacity (i.e. the main activities such as country projects, formal education, training and on the job training, policy dialogues, research and production of manuals). IV.1 Definition of Capacity Building The definition of capacity building as a means to promoting sustainable development is broad and can encompass a multitude of activities. It can mean building abilities, relationships and values that will enable organizations, groups and individuals to improve their performance and achieve their development objectives. It can also mean initiating and sustaining a process of individual and organizational change and can equally refer to change within a state, civil society or the private sector, as well as a change in processes that enhance cooperation between different groups of society. Despite this broad definition, governments, funding agencies, capacity building providers and beneficiaries should strive to agree on some common capacity building principles. For instance, capacity building should strive to strengthen the processes, systems and rules that influence collective and individual behaviour and performance in order to address evolving development objectives and adapt to new and evolving demands and needs. Capacity building should also strive to build human and institutional capabilities to address the challenges of sustainable development. Moreover, capacity building should constitute more than one-off events by incorporating adequate follow-up, evaluation and ongoing needs assessments. Most importantly, capacity building activities should not be developed in isolation. Rather, they should be developed with an understanding of how they support and complement other capacity building activities and further the goal of long-term sustainable development objectives. IV.2 Objectives of Capacity Building There is a need for a clearer understanding of the objectives of capacity building between providers and beneficiaries. Questions such as: What capacities should be built, for whom, on what topics, and to what end? need to be addressed carefully. It needs to be considered that capacity building can have three different dimensions: building awareness, building analytical capacity and building decision-making capacity. Each one is equally important, but may involve different stakeholder groups and require a different strategy. A clearer set of objectives, mutually agreed among beneficiaries and suppliers, would help to effectively target activities, reduce redundancy, improve synergies and ensure that capacity building genuinely meets the needs of countries. To achieve this, beneficiary countries should take the lead in defining the objectives of national and regional capacity building programmes for sustainable development. In order to meet the defined objectives, they should also decide upon appropriate delivery mechanisms, the national institutions to be involved, and the funding required, both from national and external sources. The following represents a possible set of objectives for building capacity in support of integrated policy design and implementation related to environment, trade and economic issues: Strengthening national capacities to develop mutually supportive economic, social and environmental policies for sustainable development; Enhancing the participation of developing countries and countries with economies in transition in international trade and environment debate and policy-making; Implementing MEA provisions taking into account economic, social and environmental considerations, while mitigating adjustment costs; Strengthening national and regional capacities in research, analysis, monitoring, and evaluation; UNEP/ETB September 05 11

12 Building of institutions and centres of excellence at local, national and regional levels to facilitate inter-agency coordination essential to the effective design and implementation of cross-cutting sustainable development strategies and integrated, mutually supportive policies; Enhancing the active participation and involvement of stakeholders in the formulation and implementation of sustainable development programmes and policies; and Empowering national and regional research and training institutions to design, implement, monitor and evaluate capacity building and training programmes. In terms of integrated policy design, it is useful to consider the objectives of capacity building within the context of a complete policy cycle: from the assessment of existing policies, to the identification, design and implementation of new policies, to the monitoring and evaluation of the reformed policies. To the extent possible, programmes should aim to assist the beneficiary countries in addressing each element of the policy cycle, rather than only one element or a subset of elements. IV.3 Key Elements of Capacity Building The manner in which capacity building programmes are designed and implemented will determine their effectiveness and impact. Based on the results of the consultation process, the following elements were identified as essential to ensure that capacity building programmes are country-driven, cost-effective, coherent, complementary and sustainable. 3.1 Needs Assessment and Priority Setting Beneficiaries have increasingly requested that programmes be tailored and based on needs assessments to ensure that they reflect current and emerging national needs and priorities. Accurate, carefully performed needs assessments are critical to priority setting and programme design and are essential if providers services are to reflect the specific conditions and priorities of beneficiary countries. Capacity building needs a multi-stakeholder approach, as different people will need different things. It is therefore necessary to identify the right target groups already for the needs assessment, also considering the poor, women and marginalized groups. Further, the needs assessment should be completed by a capacity assessment and take into consideration existing capacities as well as capacity building providers. In some countries, for example certain topics have already been mainstreamed into the general university system whereas outside assistance is still needed on other issues. If done properly, a needs assessment could provide the foundation for future capacity building efforts, and could serve as a guide to how different capacity building providers could cooperate more effectively to address national needs as part of a long-term, coordinated commitment. 3.2 Participation To ensure adequate buy-in to new policies and policy-making processes, participation needs to be enhanced and a broad spectrum of relevant stakeholders, including governments, the private sector, academia, national institutions, local communities (particularly those that are less privileged and marginalized) and NGOs need to be included in national policy assessment, development and implementation. The effectiveness of capacity building will ultimately be closely related to the process employed to enhance capacities of all relevant stakeholders and institutions. Throughout the capacity building process, broad multi-stakeholder participation will enhance its legitimacy, transparency and accountability and increase the chances that it will result in changes in policies or the way they are implemented. A participatory process helps countries address new challenges in the future by generating the critical mass of experts and institutions at different levels and in varied sectors needed for policy development and implementation. Existing experts and institutions with core competencies on economic, social and environmental subjects play a key role in providing analytical capacities and ensuring political support. Further, the involvement of local authorities and relevant decision-makers, such as parliamentarians and UNEP/ETB September 05 12

13 politicians in capacity building activities needs to be enhanced. The involvement and participation of the poor and underprivileged ensures that the interests of these segments of the population are considered and addressed, and increases the likelihood of their integration into the mainstream of society. Broad multi-stakeholder participation in capacity building activities could also catalyse partnerships with the private sector as well as with regional organizations. Involvement of the private sector, establishment of partnerships between the public and private sectors, and stronger partnerships between sub-regional and regional and international organizations in the delivery of services could increase their value, cost-effectiveness and availability. In particular, strategic partnerships with the private sector could lead to better capacity building results given their technical and financial resources to carry out such activities. 3.3 Networking and Information Exchange Building and sustaining capacity over the long-term will require enhanced networking and information exchange between partners at the local, national, regional and international levels. Networking and information exchange should be used to share experiences, provide technical and operational support, and disseminate the results of capacity building activities. Many countries have an untapped wealth of local expertise existing in national ministries, research institutions, universities and non-governmental organizations. Identifying these people, bringing them together, and sustaining their relationships can strengthen national capabilities. Therefore, one of the key goals of the process of capacity building should be to catalyse a network of institutions and national teams of experts from varied sectors and organizations to ensure that capacity building is broad-based, spans institutions and remains in place even as individuals involved in projects move to assume other functions. In the end, one of the most important outcomes of capacity building efforts is the relationships and partnerships it has created. 3.4 Country Ownership and Local Expertise Countries should be the driving force behind their capacity building initiatives. To ensure country ownership, capacity building strategies and targets need to be identified by the countries, preferably through participatory processes and as part of national development plans or other planning processes. Local experts and institutions should have a lead role in developing methodologies and approaches that are adapted to a country s needs and priorities. Moreover, to build local capacities it is important that national experts and institutions have the primary responsibility for formulating, implementing and evaluating capacity building programmes and activities. Outside technical support should be brought in to complement and support national efforts as and when required. Such a collaborative approach enhances the effectiveness of capacity building efforts and increases the likelihood that they will induce changes and be selfsustaining in the long-term. Adopting a "learning-by-doing" approach enhances the effectiveness of capacity building by encouraging ownership, securing stakeholder buy-in and building technical capacity through direct engagement of local experts and institutions. It cannot be over-emphasized that it is essential that national experts, institutions and local communities should be involved at all stages in the design, implementation, follow-up and evaluation of capacity building activities. Governments should take the lead for taking the process forward and establish focal units, which remain in charge of an activity in order to ensure institutional learning and memory. They also play a key role in disseminating results to the public, while NGOs may take the lead to stimulate new processes and activities. 3.5 Coordination and Cooperation Cooperation between capacity building providers is essential in order to ensure complementarities and supportiveness of capacity building programmes and activities. Although there are already efforts to enhance cooperation among agencies, more is still needed. Relevant international, regional and sub-regional institutions that provide capacity building services, such UNEP/ETB September 05 13

14 as UNEP, UNCTAD, the WTO, UNDP, the World Bank, UN Regional Economic Commissions, and MEAs, should cooperate more closely to provide integrated and coherent efforts to build capacity in response to national needs. This could be ensured through regular meetings. Greater efforts to coordinate among capacity building providers, such as development assistance organizations, donors and NGOs, at the national, regional and international level would help to reduce redundancy, avoid overtaxing limited capabilities to absorb capacity building services, and allow more to be achieved with fewer resources. In this context, it is critical to strengthen South-South cooperation through national, regional and sub-regional institutions. Coordination and cooperation should also include the regular exchange of information and the translation of international documents into basic language that can be easily understood by stakeholders. 3.6 Funding Ensuring adequate and sustained funding for strategic capacity building programmes remains an urgent priority. Attracting donor support for large multi-year grants to sustain long-term, integrated programmes is essential. Ensuring coordination between bilateral donors and intergovernmental and non-governmental organizations and various national institutions should enhance the effectiveness of financial resources provided to support capacity building programmes and activities. Inter-ministerial coordination at the national level will further enhance the effectiveness of these programmes. In order to maximise the positive impact of capacity building within the constraints of limited resources, efforts should focus on those areas that have the greatest and most favourable impact on sustainable development. 3.7 Monitoring and Evaluation The effectiveness of the capacity building efforts should be monitored throughout the capacity building process to ensure that adjustments are made during the process and lessons are applied to strengthen future activities. Most capacity building programmes do not include a monitoring and evaluation component to evaluate and assess their effectiveness. This should be rectified by ensuring that monitoring and assessment are an integral part of capacity building programmes in order to ensure that corrective actions are introduced when required and that the findings and outcomes of the assessment are used to formulate more effective future capacity building programmes and activities. Benchmarks could be used to monitor and evaluate the impact of capacity building efforts and to assess their long-term impact. IV.4 Delivery Mechanisms for Capacity Building As stated earlier, capacity building extends beyond training courses or the convening of workshops and seminars. It includes a broader range of activities undertaken to enhance individual and institutional capacities, foster inter-institutional cooperation and build new partnerships and relationships between multilateral, regional, sub-regional and national institutions. National and regional delivery mechanisms adopted for specific capacity building programmes should be based on needs assessments and reflect the distinct conditions existing in different countries and regions. Some of the delivery mechanisms that may be used in capacity building to promote sustainable development, and that have been shown to be successful in the past, are presented below. However, this is merely an illustrative list of such delivery mechanisms. There are a number of other delivery mechanisms available and currently being applied by capacity building providers. 4.1 Country Projects Country projects are an effective tool for building individual and institutional capacities if they are designed and conducted in an appropriate manner and address issues relevant to the country. To ensure that projects result in the desired outcomes and contribute to the enhancement of national capacities, it is essential that projects are country-driven and emanate from a real need and policy priorities of the country. In many instances, identification of the problem and project design has been undertaken by an international development or aid agency and not by local UNEP/ETB September 05 14

15 institutions. This often results in the failure of the project to identify the appropriate objectives and contribute to capacity building. To overcome this shortfall, projects should be designed as well as implemented by national experts and institutions. Moreover, all relevant stakeholders should be involved in the design and implementation of project activities. In some cases, the first step of the capacity building effort could be assistance for drafting the project proposals. The involvement of national experts and institutions in this manner will ensure that actual incountry capacities are built and strengthened. It will promote the role of and engagement of national research institutions and the private sector in national development programmes and activities. These institutions will be able to carry on the process once international development and aid agencies have pulled out. Adopting a participatory and transparent approach in the design and implementation of projects empowers local communities and the public in general and enhances the sense of ownership of the projects and their outcomes. This contributes to ensuring that the outcome of projects and recommended follow-up activities will influence policy and decision-making, and be implemented by concerned entities and accepted by the public and local institutions. Above all, such an approach ensures that the solutions and recommendations proposed by the project will provide local solutions to local problems that meet the specific needs of countries and are practical and implementable. 4.2 Thematic Research Studies and research work should be identified and led by national experts and institutions to further strengthen and enhance local capacities. Research on specific topics should build on previous work undertaken at the national and international level, and should aim at providing practical recommendations and actions to support sustainable development priorities and objectives. Collaborative South-South and North-South cooperation in research provides a strong mechanism to enhance individual, institutional and national capacities and should therefore constitute a long-term objective of countries. 4.3 Training and Education Needs assessments should result in the identification of long- and short-term training needs, including topics to be addressed, target groups and funding requirements. Such training needs should be closely linked to government development priorities and the required national expertise needed to support national development efforts. Training should build on local experiences, case studies and involve local experts. Training resource manuals and guidelines to assist national trainers to conduct training courses and programmes should continue to be developed. Such materials can then be adapted and customized to meet local needs and requirements. Ready-made training courses and workshops, which do not reflect country and regional needs, priorities and realities, have often proven to be ineffective. Strengthening capacities as part of a long-term, continuous and self-sustaining effort will require building the number and capacity of trainers. The training of trainers is a useful delivery mechanism, if undertaken in terms of long-term professional development in training skills and substantive issues. Done in such a way, it will ensure that local capacity is built and increase the likelihood that the training material will continue to be disseminated. Bringing experts and trainers together into networks, in which they could explore training materials, discuss training methodologies and further training needs, would allow for a move from a workshop-based approach of training individual officials to one of training institutions that can themselves deliver capacity building activities over the long-term. In addition to professional training, traditional educational institutions have a role to play in building the critical mass of people supporting a new concept or change process. In order for the concept of sustainable development to be nurtured from early childhood it must be formally integrated within the curriculum of educational institutions from the early years through advanced education. Post-secondary educational institutions, in particular, can provide useful capacity building by training individuals from developing countries in various areas impacting UNEP/ETB September 05 15

16 sustainable development. Training these experts and decision-makers of the future can lead to long-term capacity building and increase the likelihood that the capacity building efforts will be self-sustaining. Educating the general public on sustainable development issues is another essential aspect of moving the change process forward. Mass-media communication channels such as television, radio, websites, theatre and newspapers could be effective capacity building tools to increase awareness and facilitate distance learning. 4.4 Manuals and Reference Material Although there are many useful reference materials to support capacity building, more can be done to develop user-friendly manuals that can be customized to specific countries, issues, or sectors. In order to accomplish this, manuals and training materials should be based on best practices, experiences gained through country projects and case studies. Ideally, these materials would need to be updated on a regular basis to ensure capacity building beneficiaries are provided with the most up-to-date information and analysis. National and regional institutions should be involved and take primary responsibility to develop more systematic programmes of capacity building that are adapted closely to national and regional needs and priorities. Specific training reference manuals need to be developed to train the trainers, and provide them with the tools to pass on knowledge and skills to others. Such materials - tailored to the needs of trainers - can help empower practitioners at the national and regional levels, and catalyse the next generation of capacity builders. The documents should be simple, user-friendly, use uncomplicated language that be easily understood and translated. Manuals and reference material need to be available in local languages to ensure the desired impact. They also need to be targeted to serve a specific purpose; different materials are required for general awareness-raising as compared to building analytical or decision-making capacity. 4.5 National Workshops and Policy Dialogues Focusing on key issues, workshops should be designed to be participatory, results oriented and contribute to long-term national capacity building efforts. Workshops should aim at promoting understanding of specific issues, exchange of experience and knowledge, and provide recommendations for concrete follow-up action for enhancing national capacities to develop and implement mutually supportive policies. They can also catalyse the development of national networks of policy makers, experts and stakeholders who together can more effectively address complex policy integration challenges. To enhance ownership and to increase the value of these activities, national experts should take the lead, or at least be actively involved, in organizing and convening the workshops. Moreover, participants should, when appropriate, be requested to prepare contributions and presentations that draw on existing experiences with particular relevance to the issues being addressed. To further enhance the capacity building element, short training and breakout sessions/working groups on specific topics could be included within the workshops. Drawing on a wider range of perspectives, workshops promoting policy dialogues can help raise awareness, and encourage the exchange of perspectives among experts, practitioners and negotiators. Policy dialogues are particularly valuable in the needs assessment phase of capacity building, and for sharing existing knowledge and skills at the beginning of the design process and throughout implementation of a capacity building programme. 4.6 Regional Policy Dialogues Sharing experiences and knowledge between countries and regions allows countries to learn from the successes and failures of others, share best practices and identify new partners for further capacity building and integrated policy-making efforts. Such activities support greater South- South and East-East cooperation in capacity building activities. There is great potential to develop capacity building processes at the regional level, as similarities can be found in levels of economic development, climate and natural resource endowments, sectors of economic importance, and culture and language. The development of a common regional and sub-regional understanding about requirements for sustainable development, and the appropriate policy tools at national, regional and international levels provides fertile ground for enhancing multi-level UNEP/ETB September 05 16

17 cooperation and effective integration of policies. Regional and sub-regional institutions could provide an effective institutional set-up for delivering technical assistance and capacity building activities and programmes and assist in subsequent policy design and implementation. In addition, regional events, such as workshops, thematic research and case studies undertaken at the regional level, could be an effective tool to enhance cooperation and coordination of activities between public and private sector institutions and experts. V. Capacity Building Needs Identified in Support of Integrated Policy Design and Implementation The regional workshops and consultations revealed a strong demand for capacity building activities in support of integrated policy design and implementation. When effectively designed, delivered and evaluated, such capacity building activities should succeed in catalysing a selfsustaining cycle of integrated policy assessment, reform, design and implementation. However, as the consultation process revealed, in most instances: Efficient policies, incentives and technologies needed to promote sustainable trade, alleviate poverty and protect natural and environmental resources remain underdeveloped. Macroeconomic and sectoral policies for trade, agriculture, urban development, and tourism etc. are often formulated with little or no regard for the environment. National institutional capacities required for assessing, designing, and implementing sustainable development policies remain inadequate. National capacities to assess the implications (environmental, social and economic) of multilateral trade and environment agreements are generally weak. During the consultation process, a number of general capacity building needs related to integrated policy design and implementation were identified, including: Improving horizontal coordination and cooperation between policy sectors and the respective ministries by creating appropriate national level mechanisms to enhance communication between national entities. Improving the understanding of the inter-linkages between the social, economic and environmental impacts of policies and economic activities. Involving more ministries in capacity building initiatives for sustainable development, including the Ministries of Finance and Planning who allocate and solicit funds for countries development programmes. Improving the policy-making process by working on all steps of the policy-making cycle. Promoting good governance that focuses on supporting sustainable development goals. Improving vertical coordination and cooperation between the different international, regional, national and local administrative levels. Enhancing participation of civil society, including NGOs and the business sector. Enhancing the capacity of local experts to steer a participatory process, including how to apply methodologies. Creating an inventory of capacity building providers and ongoing capacity building activities. The consultation process also identified a number of specific capacity building needs in support of integrated policy design and implementation as it relates to environment, trade and economic issues. The following provides an overview of these needs. Specific needs identified for each region are also outlined in a table attached hereto as Annex I. UNEP/ETB September 05 17

18 Integrated Assessment Integrated (or sustainability impact) assessment provides a systematic and inter-disciplinary approach for considering the full range of environmental, social and economic impacts of proposed policies and can be applied at a number of stages in policy-making and planning processes. It is an instrument to: Coordinate actions between departments, facilitate communication and integrated policymaking, build consensus and build technical and administrative capacity. Design policy packages to promote the positive impacts of the policy and mitigate any negative ones. Encourage good governance by increasing transparency and accountability in decisionmaking and enhancing the involvement of key stakeholders such as NGOs, local communities, academia, the private sector and other domestic interest groups. Integrated assessment can also be used as a tool to enhance the capacities of governments, national institutions and local experts, particularly when these actors are responsible for the application of the integrated assessment. Specifically, integrated assessment of trade and other macroeconomic policies can assist countries in identifying and evaluating the environmental, social and economic impacts, thereby enabling the design of integrated policies that maximize the net development gains from these policies. The following specific capacity building needs related to integrated assessment were identified in the consultation process: Develop country specific assessment approaches and indicators based on country specific case studies. Raise awareness of legislators, ministers and other stakeholders about the importance of integrated assessment. Improve capacity for environmental data collection, e.g. by promoting tools such as annual environmental reporting and environmental management accounting. Enhance the capacity to assess the interlinked economic, social and environmental effects of foreign direct investment associated with privatization and trade liberalization policies. Enhance awareness of, and support additional research on, the relationship between poverty, trade and the environment and the role of trade in poverty alleviation and sustainable development. Support the development and implementation of effective harmonized policies, legislation and regulatory frameworks to address trade and its environmental, economic and social impacts. Enable countries to develop and implement appropriate policy responses to the outcomes from integrated assessments. Promote ex-ante assessment during policy planning processes instead of identifying flanking policies ex post. Develop clear cut-off criteria, as integrated assessment cannot be applied to every single decision in view of limited government resources and capacities. Enhance coordination and information exchange between key actors regarding experiences with integrated assessment and clarify differences in terminology, language, assumptions and approaches used by the various actors in this area. Positive and Perverse Economic Incentives Market-based incentives, including economic instruments, if properly designed can be effective tools in promoting sustainable development by influencing production and consumption UNEP/ETB September 05 18

19 patterns, raising revenue for sustainable development purposes and supporting the implementation of MEAs. Conversely, certain subsidies, such as those used in the fisheries sector, can often create perverse incentives and contribute to over-consumption and environmental damage. Development and implementation of integrated market-based policies, and reduction of market- and trade-distorting policies, including environmentally damaging subsidies, would help secure the sustainable management of natural and environmental resources needed to support national development objectives. The following specific capacity building needs related to incentive measures were identified in the consultation process: Promote the use of economic instruments to achieve environmental and sustainable development objectives, including the implementation of MEAs. Enhance sustainable management of trade-related natural resources including the use of economic instruments. Develop educational programmes to train environmental economists in developing countries and regions where there is a shortage of such expertise. Assess the environmental as well as social and economic impacts of fishery subsidies. Reform perverse fisheries subsidies and enhance sustainable fisheries management. Build capacity in understanding the polluter pays principle. Natural Resource Valuation and Accounting Current systems of national accounts provide misleading information on national economic growth. Decisions are often taken narrowly on the basis of incomplete projections of GDP growth, which neglect social and environmental indicators and costs associated with natural resource depletion and environmental damage. The real impacts of trade are seldom revealed in systems of national accounts (SNAs). Natural resource accounting is a tool that enhances the accuracy of SNAs by reflecting the depletion and degradation of natural resources resulting from economic activities. Attempts should be made to demonstrate how the environmental, economic and social impacts of trade and other macroeconomic policies could be incorporated in SNAs so that trade policy options capable of maximising welfare and sustainability can be identified. The following specific capacity building needs related to natural resource valuation and accounting were identified in the consultation process: Promote more accurate valuation of natural resources to ensure that resources are not underpriced, and that local communities can receive a fair price for their products. Identify and apply appropriate tools and techniques for the economic valuation of environmental goods and services. Develop techniques and methodologies to reflect the depletion and degradation of environmental and natural resources on the system of national accounts to develop more accurate indicators for measuring development and human welfare gains. Market Access and Sustainable Trade Securing greater market access is a major trade objective of developing countries. However, assistance is particularly needed in least developed countries, where the ability to comply with standards is limited and knowledge of international standards needs to be improved. Capacity building must help countries to identify and enhance synergies between economic growth, the eradication of poverty, and enhanced environmental protection. There is a need to develop trade policies that promote poverty alleviation, sustainable trade and the equitable distribution of the benefits of trade. UNEP/ETB September 05 19

20 New policies and market-based instruments are required to enhance market penetration while allowing for product differentiation and providing an incentive for more sustainable production and consumption. In some cases they may need to support the higher profit margins producers need to finance the greater cost internalisation of environmental externalities, both within firms and through national policies. The following specific capacity building needs related to market access and sustainable trade were identified in the consultation process: Enhance compliance with international health and environmental standards and identify opportunities for market access for certain exports. Enhance compliance with sanitary and phytosanitary measures (SPS) and technical barriers to trade measures (TBT), for instance: addressing concerns of conformity assessment, active participation in international standard setting, facilitation of market access, independent certification, and avoiding the involuntary introduction of invasive alien species. Assist in understanding the relationship between the emerging biosafety regime and the WTO SPS and TBT Agreements. Assist negotiators in preparing for international negotiations and in participating effectively in related forums, such as the WTO Committee on Trade and Environment (CTE). Provide better training for customs officers, especially in the light of growing illegal trade, which often has significant negative environmental impacts. Assist countries to adjust to major transitional challenges posed by the multilateral trading system, to assist them in reorienting their economies and diversifying their production base. Identify goods, services, and the mechanisms that promote sustainable trade. Examine the market-access and environmental effects of eco-labelling, and identify tools and procedures to maximise the contribution of eco-labelling to sustainable development. Build capacity on understanding trade, environment and poverty interlinkages. Promote trade in environmentally friendly products, particularly those from developing countries. Assessing the impact of environmental regulations on the exporting capacity of developing countries has been identified as a specific need that is not sufficiently considered in capacity building activities. MEA Implementation The continuing expansion of international environmental and trade laws is increasing the need for policy coherence and coordination at all levels, and in particular between MEAs and the WTO. To maximize the joint contribution of trade and environment policies to sustainable development, the mutual supportiveness and coherence of trade and environment agreements, and the related rules and institutions need to be strengthened. For many developing countries and countries with economies in transition, insufficient capacity and limited technical, technological and financial resources impede the implementation of MEAs. Capacity building efforts, therefore, would need to include activities to make the complex and often finely balanced international agreements comprehensible to the respective policy making communities and enable them to understand inter-linkages and identify synergies. The following specific capacity building needs related to MEAs were identified in the consultation process: Promoted integrated assessments for mainstreaming MEA commitments within national economic development and poverty reduction plans and identifying the extent to which they affect other economic sectors. UNEP/ETB September 05 20

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